Qatar’s infrastructure projects pipeline is set to soar with more than $30bn worth of new projects deals in 2015, according to the latest data from MEED Projects, the region’s leading online projects tracker. The record year has come on the back of major project awards on Ashghal’s Expressway and Local Roads & Drainage Programs as well as significant investment in real estate and transport projects such as Msheireb, Lusail and the New Port Project.
This year will be boosted by forecasted project awards on the $5bn-plus Al-Karaana petrochemical complex, the $2bn-plus rolling stock and systems contract on the Doha Metro, and five main multi-billion-dollar packages on the mega water reservoirs main packages.
“Despite falling oil prices, Qatar has the project pipeline, the political impetus, and the financial reserves to continue project spending as it prepares to host the FIFA 2022 World Cup,” says Ed James, Director of Analysis at MEED Projects. “With around $30bn worth of projects, 2014 witnessed a 25% increase in project spending as compare to the year 2013, and there will continue to be an upward trend in project activity.”
Project spending will be boosted by the fact that Qatar continues to be the fastest-growing economy in the GCC in the years to 2020 as the country presses ahead with one of the world’s most comprehensive and ambitious economic development and infrastructure programs.
According to the Qatar’s Ministry of Development Planning & Statistics, Qatar’s economy will expand by 7.7 per cent in 2015, providing evidence that the world’s leading LNG exporter expects lower oil prices will have minimal impact on growth.
“Solid expansion in non-hydrocarbon activities will continue to drive overall economic momentum, propelled by investment spending, an expansionary fiscal stance and population growth,” the ministry said. “In calendar years 2014-2016, the overall fiscal balance is expected to stay in surplus.”
Qatar is the Middle East’s most creditworthy economy. The Standard & Poor’s credit rating is AA. Moodys rating for Qatar sovereign debt is Aa2.
The IMF’s annual Article IV report on the Qatar economy published earlier this year showed Qatar’s budget and balance of payments’ surpluses were by far the highest in the region and were among the largest in the world. Its financial reserves are more than 100 per cent of GDP.
“Qatar has ample policy space to deal with unexpected circumstances in the short term,” the IMF said. “Fiscal buffers and remaining natural resources are sizeable and spending is unlikely to be affected by a drop in hydrocarbon prices or market volatility in the near term.”
Qatar’s oil and gas wealth per capita is the highest in the world. “Qatar has enormous oil and gas wealth, especially in relation to the size of its national population,” Qatar National Bank said in a report in September. “At current extraction rates Qatar’s proven gas reserves would last at least another 156 years.” Combined oil and gas production in 2014 is equivalent to more than 2 million barrels a day.